Abstract Layer-2 Network Faces Liquidity Challenges Despite Initial Success
Abstract, a layer-2 network by Pudgy Penguins, launched with 711,000 transactions on its first day but faces liquidity challenges. Its total value secured (TVS) stands at $33.37 million, significantly lower than competitors.
Source: L2Beat
NOXA, the decentralized exchange within Abstract, saw its total value locked (TVL) drop from $515,000 to $109,231, indicating a lack of investor interest despite an easy onboarding process.
Source: DeFiLlama
To boost engagement, Abstract introduced "xp points" for mainnet interactions, but community feedback suggests participants favor NFT trading over earning xp.
No DeFi? No Problem, Says CEO
CEO Luca Netz emphasized entertainment over DeFi integration in Abstract's vision. Users can perform basic token operations, but the focus is on creating fun experiences rather than deep financial applications.
Netz stated that building on Abstract should be about making it “fun, viral, simple.” He recommended other platforms for serious DeFi projects.
PENGU 37% Drop In a Week
The struggles of Abstract are reflected in the performance of Pudgy Penguins' native token, #PENGU, which has decreased 6% in 24 hours and 37% over the past week. This decline may be linked to unmet expectations regarding the mainnet launch.
The NFT market remains sluggish, with January trading volumes on OpenSea around $15 million per day, down from a $160 million daily average in 2022.